Appliance maker Whirlpool of India’s foreign promoter, Whirlpool Corporation, will be selling a 24% stake in the company through block deals in a transaction valued at $451 million (around Rs 3,740 crore) this week, according to informed sources. Executives at Whirlpool of India were not immediately available for comment.
The floor price has been set at `1,230 a share, with 30.4 million shares on offer, according to the term sheet, which has been reviewed by FE. Goldman Sachs is advising Whirlpool on the transaction. The seller will be Whirlpool Mauritius, a unit of Whirlpool Corporation. The block deal will be completed by Wednesday.The base size of the deal is pegged at $282 million, which represents 15% of the outstanding share capital and the upsize option of the deal is up to $169 million, which represents 9% of outstanding share capital.
Interestingly, the floor price of the deal is at a discount of 8.19% to the current market price of the stock on the BSE. On Monday, Whirlpool of India shares closed nearly flat at Rs1,330.75 apiece on the BSE.The stake sale is in line with the American major’s commitment to deleverage its balance sheet. In November last year, Whirlpool Corporation had said that it would sell 24% in its Indian unit to reduce its debt. The company holds 75% in the Indian company.
Proceeds of the stake sale, the company said, would be used for debt repayment that were incremental to the $500 million term loan repayment it had previously disclosed.
The American major had also said that it saw India as a significant marketplace for growth and an integral part of the company’s growth strategy in the future.
“The company remains committed to expand the business with new product launches and the recently acquired Elica India business,” it said of its India strategy.